Absa unveils revised mortgage version friendlier to prospective home-owners

Minister for Lands, Housing and Human Settlements, Dr. Angeline Mabula (centre), is accompanied by (from the left) National Housing Corporation Managing Director, Nehemiah Mchechu, Absa Bank Tanzania Head of Retail Banking, Ndabu Lilian Swere and Absa's Managing Director, Abdi Mohamed during the launch of the bank’s revamped mortgage proposition in Dar es Salaam over the weekend.

By Our Reporter, Dar es Salaam

Minister for Lands, Housing and Human Settlements Dr. Angeline Mabula has commended Absa Bank Tanzania, for entering into the pre-sale mortgage market segment that offer space.

The minister gave the thumbs-up during the launch of Absa's revamped mortgage proposition that was held simultaneously with the signing of the Memorandum of Understanding (MoU) between the bank and the National Housing Corporation (NHC) in Dar es Salaam over the weekend.

The minister said the move will help to address the challenge of availability of quality housing units in the country, noting that land investment was crucial as it has been playing a key role in improving the country’s income, thus contributing heavily to its development.

“The government introduced mortgage financing company way back in 2010 to spearhead housing construction in the country and speed up development,” said Dr..Mabula.

She added, “The president’s vision is to see that the private sector partners with the government so that a lot more Tanzanians own houses.”

According to the 2022 Housing Population Census, at least 390,000 housing units were needed annually to meet the country’s housing demand.

The minister noted that there was need for the public and private sectors to borrow modern technologies to speed up housing construction in the country.

On his part, Absa Bank Tanzania Managing Director, Abdi Mohamed, said the bank will be partnering with an Insurance Service Provider through the Collateral Replacement Indemnity (CRI) to offer 100 per cent mortgage towards a property purchase facility to make the product even more affordable.

The move, he said, means that customers will not be required to deposit any down-payment.

“Our flexibility in credit assessments also means that our customers will be able to include any verifiable additional incomes to be added into their disposable monthly income as a basis for the bank to determine loan amount eligibility,” said the Absa CEO..

The launched mortgage proposition has enhanced features, making it one of the most attractive mortgage propositions in the country.

Absa embarked on a journey to revamp its mortgage proposition in 2021 to ensure that the improved version meets and exceed current and anticipated customer needs, turning it from a standardized loan product into a home ownership solution for all Tanzanians.

Among the key improvements are reduction of the costs associated with the product to make it more affordable, by trimming down the required down-payment towards house purchase from 20 per cent to 10 per cent.

The bank has also enhanced the revision of the maximum loan size which has been revised upward from Sh500 million to Sh1 billion.

This change removes the loan size limitations for customers, enabling those with higher incomes to be able to purchase high-end house units that they previously would have not been able to.

Mr. Mohamed said to address the challenge of unavailability of quality affordable houses on sale, the bank has signed Memorandum of Understanding (MoU) with reputable property developers to finance the individual purchase of housing units sold by these developers on a pre-sale basis

“We know that everyone wants to own a house as it is a basic need for every person. A lot of people use savings to build their own houses which takes up to ten years,” he said.

According to the MD the bank’s aspirations is that one can own a house as the bank has partnered with the National Housing Corporation and set up a one-stop shop covering all aspects of buying, building and renovating of houses.

The bank has also expanded its market base locally to accommodate other regions outside of Dar es Salaam that were previously not served with mortgage, meaning that customers in all regions where Absa is present (Dar es salaam, Arusha, Moshi, Mwanza, Mbeya, Tanga, Morogoro, Dodoma, Iringa, and Zanzibar) will be able to apply for Absa Mortgage.

The bank has also opened up its mortgage solution to the Diaspora, through its “Diaspora Mortgage”, which will offer home loan solutions to Tanzanians residing overseas wishing to invest in real estate back home.

Commenting on the cooperation, NHC’s Managing Director Nehemia Mchechu said NHC was partnering with 20 banks in construction of houses, targeting the middle and low income earners.

Mchechu said NHC will ensure that all its projects are within the Central Business District (CBD) of respective urban settlements to ease transport logistics to home owners.

Absa Bank Tanzania Limited is one of Tanzania’s leading financial institutions offering an integrated set of products and services across Corporate and Investment Banking, Business Banking with solutions for SMEs, and Retail Banking.